Prosecutors In Germany Expand Tax Evasion Inquiry

FRANKFURT — German prosecutors said on Friday that they were investigating several hundred people on suspicion of tax evasion in a case that quickly claimed the job of Klaus Zumwinkel, the chief executive of Deutsche Post.

Klaus Zumwinkel is resigning as chief of Deutsche Post.

The investigation has rapidly become an embarrassment for the country’s moneyed elite and is feeding a simmering debate over economic justice.

A day after the police searched the home and office of Mr. Zumwinkel, a special financial crimes unit in the northwestern city of Bochum said that it had obtained highly conclusive evidence of tax evasion on a much wider scale.

Little has been disclosed about the suspects in the case, though German officials made clear that they expected at least some household names to pop up. Torsten Albig, a spokesman for the Finance Ministry, said that the investigation included wealthy and accomplished Germans who were “known and unknown” to the wider world.

Chancellor Angela Merkel said in Berlin: “I think I feel the same way that many people feel in Germany. This is beyond what I could have imagined and what many people could have imagined.”

The prosecutors said that their evidence concerned the investments of hundreds of people, particularly in foundations in Liechtenstein, that appear to have been created solely to evade taxes.

Leaving no doubt as to the magnitude of what they called a nationwide investigation, the Bochum authorities said that they had called in reinforcements from agencies in three other cities as well as state investigators from Düsseldorf.

The German authorities said that they had strong evidence that would lead to prosecutions. Senior German officials noted that the law looks favorably on people who confess, often allowing them to escape with a fine rather than a prison sentence. The prosecutors’ tactics included a raid Thursday accompanied by television crews.

“This has a new quality for us in Germany,” said Rudolf Schwenger, a former tax investigator in Germany’s financial capital, Frankfurt. “Normally we associated investigators arriving with TV cameras with the United States, not this country.”

Mr. Zumwinkel, the first target of the investigation, said late Thursday that he would remain in his position but he immediately faced a ferocious political reaction. By Friday afternoon, he announced that he would resign as chief executive of Deutsche Post, which operates the German mail system, and chairman of its majority-owned banking subsidiary, Postbank. The company is also the parent of DHL, the package delivery service.

Deutsche Post, though listed on the Frankfurt exchange, is still 31 percent owned by the German federal government, and senior German officials made clear Friday that they would use that leverage to force Mr. Zumwinkel out. He also serves as chairman of Deutsche Telekom, a position he is widely expected to quit as well.

Mr. Zumwinkel had been expected to step down this year after 18 years on the job, and he had already begun grooming a successor, Frank Appel, who heads Deutsche Post Logistics.

Mr. Zumwinkel told the newspaper Bild that he would take an “active role in clarifying the questions about my private finances.” He added: “I wanted to usher in a new era, but with a different changeover than has happened now.”

Finance Minister Peer Steinbrück said the example of a senior executive’s being accused of not paying his fair share of taxes — and not immediately stepping down — was sure to provoke widespread outrage.

“What should the taxpayer believe?” he said in an interview with the German broadcaster N24. “He pays his taxes dutifully, and the big guys cash in?”

Despite the reputation of Germans as law-abiding, tax evasion is widely thought to be rampant among the wealthy, who have a selection of tax havens — notably Luxembourg, Switzerland and Liechtenstein — at their doorstep.

Using a Liechtenstein foundation is a tactic well known to German prosecutors, though one notoriously difficult to unravel from the outside. Liechtenstein’s law imposes only light taxes and allows foundations to pay proceeds from their investments to owners and their family members. The money is usually then routed to other bank accounts outside Germany.

“It depends on keeping this quiet from the tax authorities in Germany,” Mr. Schwenger, the former tax investigator, said.

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